Consider the following to answer the question(s) below:
A study was recently performed by the Canada Revenue Agency to determine how much tip income waiters and waitresses would make based on the size of the bill at the table. A random sample of bills and resulting tips was collected. These data and regression results are as follows:

-In testing the null hypothesis H0: β1 = 0, at α = 0.05
A) we reject the null hypothesis and can conclude that there is a significant relationship between the amount of the total bill and the size of the tip received by the server.
B) we fail to reject the null hypothesis.
C) we reject the alternative hypothesis.
D) we fail to reject the null hypothesis and can conclude that there is no significant relationship between amount of total bill and the size of the tip received by the server.
E) we conclude that the amount of the total bill and the size of the tip received by the server are not related.

Question

Consider the following to answer the question(s) below:
A study was recently performed by the Canada Revenue Agency to determine how much tip income waiters and waitresses would make based on the size of the bill at the table. A random sample of bills and resulting tips was collected. These data and regression results are as follows:
  
-In testing the null hypothesis H0: β1 = 0, at α = 0.05
A) we reject the null hypothesis and can conclude that there is a significant relationship between the amount of the total bill and the size of the tip received by the server. 
B) we fail to reject the null hypothesis. 
C) we reject the alternative hypothesis. 
D) we fail to reject the null hypothesis and can conclude that there is no significant relationship between amount of total bill and the size of the tip received by the server. 
E) we conclude that the amount of the total bill and the size of the tip received by the server are not related.

Quizplus · Accepted Answer

In testing the null hypothesis H0: β1 = 0, at α = 0.05, we would reject the null hypothesis if the p-value is less than 0.05. Looking at the regression output provided, we see that the p-value for the coefficient of the total bill (β1) is less than 0.05 (0.000), indicating that we should reject the null hypothesis. Therefore, we can conclude that there is a significant relationship between the amount of the total bill and the size of the tip received by the server.

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